Exam One

Chapter 1
Operations Strategy and Global Competitiveness

Multiple Choice

1. A purposeful collection of people, objects, and procedures for operating within an environment is known as a(n):
a) Operation
b) Sub -system
c) System
d) Sub-operation

Answer: c
Difficulty: Easy
Response: See page 7
Reference: Operations

2. Which of the following is among the six major elements of a production system?
a) Inputs
b) Output
c) Monitoring and legislative compliance
d) Only A and B

Answer: d
Difficulty: Easy
Response: See Figure 1.1 on page 8
Reference: Operations

3. Value can be added to an entity in all the following ways, EXCEPT:
a) Altering
b) Facilitating
c) Storing
d) Transporting

Answer: b
Difficulty: Easy
Response: Value can be added by altering, transporting, storing, and inspecting. See p. 10.
Reference: Operations

4. A type of output that commonly results from a production system is:
a) A product
b) A service
c) Neither A nor B
d) Both A and B

Answer: d
Difficulty: Easy
Response: See page 10
Reference: Operations

5. Which of the following is NOT considered a characteristic of a service?
a) Intangible
b) Labor-intense production
c) Quality difficult to measure
d) Delayed consumption

Answer: d
Difficulty: Easy
Response: Services are consumed immediately. See page 11
Reference: Operations

6. A distinction between normal goods and information/knowledge is that
a) Normal goods wear out, but information/knowledge does not
b) Information/knowledge can be given or sold to many others
c) Information/knowledge is subject to diminishing returns, but physical outputs are subject to increasing returns
d) Both A and B

Answer: d
Difficulty: Medium
Response: Page 13
Reference: Operations

7. Inputs in a bank’s production system may include:
a) Loan default rates and the environment
b) Interest rates and wage rates
c) Checks and deposits
d) Federal Reserve decisions and the economy

Answer: c